OIG eyes drug company 'conduit' charities

The Office of Inspector General issued guidance last week to control fraud and abuse linked with independent charity patient assistance programs (PAP) for federal healthcare program beneficiaries.

Independent charity PAPs give financial aid to people who can't meet their cost-sharing responsibilities for covered prescription drugs. PAPs provide a safety net for many people with chronic illnesses and high medication costs, and pharmaceutical manufacturers may donate appropriately to these charities.

But charities that aren't independent from their donors may run PAPs that harm patients and insurance programs, the OIG announced last week. The government is keeping an eye on possible beneficiary inducements and violations of the anti-kickback statute that result from donations with strings attached.

Cases in point: If a drug company makes PAP donations in exchange for recommending or arranging for purchase or prescription of its own products, then the anti-kickback statute may be violated, according to an OIG bulletin. Similarly, if a PAP gives financial aid to influence beneficiaries to buy a certain drug, that practice may be inappropriate.

Some PAPs focus solely on helping patients with particular diseases such as cancer or diabetes; but problems arise when charities define their disease funds so narrowly (limiting them to a certain stage of cancer, for example) that donors end up subsidizing their own products.

"Pharmaceutical manufacturers and their affiliates should not exert any direct influence or control over the charity or its assistance program," the bulletin states. Therefore, charities shouldn't release information allowing donors to match the amount or frequency of donations with the number of aid recipients who use their products or services, the OIG wrote.

Moreover, if PAPs only cover copayments for expensive or specialty medications, then the programs may contribute to wasteful healthcare spending and rising drug prices. A problematic loop results, since rising prescription drug prices and consumer cost sharing are linked, as FierceHealthPayer reported. Limiting financial aid to specific drugs may steer patients away from other products with more potential benefits, the OIG noted.

For more:
- read the OIG's announcement and supplemental special advisory bulletin